from the eyebrows-raised dept

If the name Kali Kanongataa doesn't ring a bell, he was the man who sued roughly all of the news for copyright infringement earlier this year. The whole episode stemmed from Kanongataa having put the birth of his child up on Facebook through the site's live streaming function in 2016. Many, many news organizations used snippets of the video in their reporting on the viral nature of the video, which had been viewed over 100,000 times. Kanongataa ultimately lost those suits on obvious Fair Use grounds and the various news organizations subsequently petitioned to be awarded attorney's fees, which the court ultimately granted.

Well, Kanongataa has since petitioned the court to vacate or reduce those attorney's fees awards on two grounds. First, Kanongataa claims his financial situation is such that these awards would bankrupt him. As the court notes however, denying the request, Kanongataa only claimed this and failed to provide any sort of evidence of his financial situation.

The difficulty here, however, is that the plaintiff has submitted no evidence at all as to his financial circumstances only an unsworn statement in a memorandum by his lawyer, which does not cut it. As Judge Chin illustrated in the Muller case, reductions in fee awards based on an unsuccessful party's limited means typically, or at least often, are made in response to evidence rather than airy claims. And this is not unique to fees under the Copyright Act. A party resisting an award of costs under Rule 54 on the basis of inability to pay, for example, bears the burden of proving the extent of its financial resources.

While Kanongataa's subsequent claim that NBC specifically inflated the amount of time billed for its defense was also denied, the real gem in the court's written response is in a later portion on the matter of Kanongataa's financial situation. Where the court again highlights that Kanongataa submitted absolutely zero evidence for his financial situation, the court footnotes the following:

The Court expresses no view on whether and to what extent plaintiff may have recourse against his attorney for the attorneys' fees awarded here in View of any attorney advice to pursue this case and the failure to submit evidence of plaintiff's financial condition.

The court can preface this footnote any way it wants, but this sure reads like a heavy-handed hint to Kanongataa that he may want to look into recouping costs through his attorney for even bringing this case before the court in the first place, never mind failing to properly advise him on his claims of financial strife. This pretty clearly reads like a court that knows this is a case that never should have made it past the idea stage in Kanongataa's head, with clear implications that his attorney should have advised him against, or refused to even assist him with, putting any of this in motion.

One wonders exactly what sort of faces Kanongataa's attorney made upon reading this.

from the the-sarcasm-is-flowing dept

The online gaming company Zynga is no stranger to patent lawsuits. Like basically any high-profile internet company, it's been sued a bunch of times, usually by patent trolls who are holding broad, generic patents on obvious concepts. In 2011, Zynga was sued by a company called Segan LLC, which does not seem to exist in any real form, other than as a company set up to sue Zynga over this patent (ridiculously Bloomberg News called Segan "a rival" despite Segan having no products and no presence online whatsoever). The patent in question is US Patent 7,054,928 and it's for a "system for viewing content over a network and method therefor."

Earlier this year, the judge in the Northern District of California (note: not East Texas!) Judge Vince Chhabria tossed out the case, noting that Zynga doesn't come anywhere close to performing what's in the patent. Zynga then moved in for the kill, asking for attorneys' fees and sanctions... and Chhabria has given it to them, along with a delightfully sarcastic benchslap of Segan and its lawyers. I really suggest reading the full order from Judge Chhabria, as it's quite enjoyable reading -- but here are a few of the highlights. First, it's important to understand what the '928 patent actually covers:

In the 1990's, Marc Segan came up with an idea for how people could surf the Internet, and how companies could draw Internet users to their websites. His idea was to allow Internet users to obtain an "icon" (say, an animated image of a cowboy or a baseball player) and entice the users to travel to designated websites with their icons. So for example, a person with a cowboy icon might visit a designated website because the site offers "enhancements" to cowboy icons (such as cowboy boots, or hats, or spurs). The person might click a button on the website, or correctly
answer a trivia question posed on the website, and his cowboy icon receives an enhancement as a reward (for example, a cowboy hat appears on the animated cowboy's head). And hopefully while the person is visiting the site with his cowboy icon, he might buy an actual product – perhaps real cowboy boots, or perhaps a bottle of CowboyTM Bourbon – to make the whole endeavor worthwhile for the participating website.

He eventually gets the '928 patent that kinda sorta covers this, but when you get down to the crux of it, the patent could be summarized as follows:

In other words, Segan invented a system whereby a person who might for some reason be interested in using a character icon to browse the Internet is incented to visit particular "target websites" from which the icon could receive "enhancements" from those websites.

Okay. That's the background. The judge then gives the background of Zynga, immediately noting that: "It is not in the business of finding ways for people to explore the Internet. It is a social video game company." This does not bode well for Segan. The judge describes what Zynga does, and explains how it's nothing like what's in Segan's patent. At all. And there are little asides and jabs that make it clear he's not happy that this case ever showed up in the first place. And then he dives in to explain how Segan and its lawyers' attempt to pretend the patent applied to Zynga were so ridiculous:

This case is indeed exceptional, and Segan is indeed required to pay Zynga's fees, because the lawsuit was objectively baseless from the start. It is obvious that Claim 1 in the '928 patent describes an invention very different from the one Zynga practices in games like FarmVille. This is perhaps best illustrated by a claim construction position relating to the word "access" that Segan took throughout most of the litigation.

Among other things, Claim 1 of the '928 patent identifies a "service provider" from which the user obtains the character icon and which stores the user's information, and a "target website" that people visit to get enhancements for their characters. Claim 1 states that the target website uses a "unique identifier" on the user's device to "access" the user's record "at" the service provider, "whereby any new character enhancement offered to the user is appropriate for the user's character icon." In other words, with the invention described in the '928 patent, when someone is browsing the Internet with his cowboy icon and goes to a target website, that website accesses the user's record from the service provider so that the target website knows to offer the cowboy a pair of boots (rather than, say, a baseball glove). So for there even to be a chance of infringement, Facebook (the target web site) would need to access from Zynga (the service provider) the user record of the person playing FarmVille, so that Facebook could offer an enhancement for that person's FarmVille icon. But that doesn't happen, because that's not the way the Zynga-Facebook system works. That is so for a variety of reasons, but one of the most obvious is that Facebook does not "access" or "obtain" any user records for FarmVille players from Zynga.

To try to avoid this glaring problem, Segan proposed that when Claim 1 says that the target website accesses the user record at the service provider, what the claim really means is that the target website sends user information to the service provider. Specifically, Segan proposed that the phrase "target website uses the unique identifier on the user device to access the user's record at the service provider" should be construed as follows: "the target website communicates information associated with the user to the service provider so that subsequent activity (offering a new character enhancement) is consistent with information in the user's record and thus conducted in a way suited to that user's particular character icon . . . ."

This was one of the main pillars on which Segan's infringement suit rested – the assertion that when Facebook "communicates information . . . to the service provider," Facebook is somehow "accessing" user records from Zynga. Segan proposed this construction even though every time the verb "access" or "accessing" appears in the patent (and it appears many times), it is used in the ordinary way (i.e., "to obtain" or "gain entry to"). Segan might as well have argued that the sky is the ground. Even in the world of patent law, where lawyers and experts often take great liberties with words, this proposed construction of "access" stands out as exceptional.

Just a note: when a judge suggests you "might as well have argued that the sky is the ground," things are unlikely to end well for you. The judge then lists out a bunch of cases where attorneys' fees were awarded for egregiously bad patent lawsuits, and notes that this is "more lacking in merit" than basically all of those cases.

That might be bad enough, but it gets worse. Because after Segan tried and tried to redefine access, and after it was shown that there is no access, Segan tried another game... with another word.

But then, to get around the fact that Facebook does not actually access a user's record from Zynga (at least when "access" is used in any remotely understandable fashion), Segan came up with a different way of tackling the same problem: it proposed, for the first time, to construe the word "website" (of "target website") as "a set of related web pages, each page identified by a URL and including its underlying code and all content presented by a browser when a user visits that page." In other words, Segan's new infringement theory was that when a user plays FarmVille while on Facebook, the FarmVille game becomes part of the "target website," and therefore when Zynga is sending code and content to the user of the FarmVille game, the "target website" is actually "accessing" the code and content (even though Facebook never gets it). As the discussion in Section I illustrates, that's not what the '928 patent meant when it used the phrase "target website." But even aside from that, as the Court explained in its claim construction and summary judgment order, at least two other claim limitations were obviously not met as a matter of law.

In the end, the judge orders Segan to pay Zynga $1,188,773.93 in legal fees. Segan also tried (of course) to argue that these fees were unreasonable, but the court shuts that down, noting that, if anything, these are "on the low side for a case like this" and "given the... difficulty Segan put Zynga through."

Separately, Zynga asked for sanctions against the law firm representing Segan, Blank Rome -- and again the court agrees, though rather than making that firm jointly and severally liable for the full amount of the fee award, it just tacks on $100,000 in sanctions for the law firm. Judge Chhabria notes that the work by Blank Rome failed in how it handled claim construction and infringement theory (in a footnote it also suggests that the firm's "litigation conduct" was so bad that the Blank Rome lawyer who handled the hearing about the attorneys' fees "admitted he 'cringed' at some of the conduct of his colleagues.") And then there was this:

Segan's attorney instructing its expert not to answer – time and time again – when Zynga's counsel asked the expert about the expert's factual investigation to support his expert testimony and about the assumptions he was adopting as part of his expert opinion

But, even ignoring that, the judge finds that Blank Rome failed so badly in actually figuring out what this patent covered and whether Zynga infringed, that it deserves to be sanctioned. He doesn't think the lawyers were evil, just not very good at their jobs:

... even though the Blank Rome attorneys devised and put forth objectively baseless claim construction and infringement positions, the record suggests they did not pursue the lawsuit in bad faith or with an improper purpose. For example, several of the pre-filing communications among Blank Rome attorneys are more suggestive of lawyers who come to believe in a ridiculous argument than they are of lawyers who are preparing to file a lawsuit in bad faith.

That seems like faint praise.

Segan has indicated that it's appealing this case up to CAFC, and CAFC certainly can have some nutty rulings, but this case is so weak that it would be surprising if CAFC completely reverses things.

from the costly-buffoonery dept

Miami Heat part-owner Ranaan Katz will be parting with a bit of his fortune because he is a censorious blowhard who doesn't know when to quit.

Back in 2012, Katz got all sensitive about a blog that posted some court documents he didn't want published. To add imagined insult to imagined injury, the blog also posted a less-than-flattering photo of Katz. This one, to be exact:

Katz tried a "fresh" approach -- one that has been used by others with similar censorious motivations. He went the copyright infringement route. He purchased the copyright to the unflattering picture and filed an infringement lawsuit against the blogger (and Google, which hosted the blog). He also threatened to sue the blogger's lawyers, because Ranaan Katz has yet to discover a hole he couldn't make bigger.

And, for some ungodly reason, he nearly won. His barefaced effort to use copyright protection as a blunt "shut the fuck up" weapon was humored by a lower court, which issued a ridiculously broad injunction against the blogger. But upon later review, the district court decided the use of the photo was clearly fair use.

Plaintiff holds the copyright to an unflattering photograph of himself which Defendant published as part of highly critical blog articles she wrote about Plaintiff. Plaintiff purchased the photograph only after he realized Defendant’s use of it in her blog. Plaintiff’s purchase of the photograph was, from his perspective, to “stop this atrocity” of Defendant using the picture in her critical blog.

As explained by Magistrate Judge Chris M. McAliley in her Report and Recommendation recommending granting summary judgment in favor of Defendant:

Plaintiff is a businessman who testified that he considers the Photo “ugly” and “candid and embarrassing.” He does not claim to be a celebrity and does not claim Magriso’s (the original copyright holder’s) market as his own. Not surprisingly, Plaintiff has not tried to sell or license the Photo to anyone. Rather, Plaintiff testified that he obtained the Assignment of Copyright “[b]ecause I wanted to stop this atrocity.” (Plaintiff views the transfer of copyright as “a correction - correction of a mistake that happened.”). He has not used the Photo other than in this litigation, and has done so here to prevent its publication.

[...]

As Judge McAliley recognized in her Report and Recommendation, no reasonable fact finder could find for the Defendant. Plaintiff was privy to all the facts which led to summary judgment in Defendant’s favor from the outset of the litigation. He was fully aware when he filed the suit that he had no intent to profit from his copyright, nor was he a victim of any economic damages from Defendant’s use. The fact that the Court found three out of four factors weighed in favor of Defendant and the other was neutral clearly indicates that Plaintiff’s attempts to stymie Defendant’s speech are precisely what Section 107 is designed to protect against.

Even better, the court calls him out for using copyright as a weapon.

Instead of using the law for its intended purposes of fostering ideas and expression, Plaintiff obtained the photograph’s copyright solely for the purpose of suppressing Defendant’s free speech. Unsurprisingly, Plaintiff argues that protecting his rights under the Copyright Act was his sole motivation for filing this suit. [D.E. 187 at 13]. That assertion is rather dubious. Plaintiff has characterized this action as “just one battle” in a “malicious war.” [D.E. 187 at 1]. While Plaintiff might view it necessary to remove his unflattering picture to “stop this atrocity” [D.E. 148 at 23], he may not resort to abusive methods to do so.

Copyright as censorship. Only this time, someone's actually out a fair bit of cash for abusing the system. That, in and of itself, is an anomaly.

from the too-bad dept

We've written a few times about how the film Elf-Man was used in some copyright trolling shakedowns, mostly focusing on some documents that came out in the case of Elf-Man v. Ryan Lamberson, revealing how a German anti-piracy company which keeps changing names and identities appeared to be behind not just that case, but many, many, many copyright trolling cases. The lawyers for Lamberson, mainly Chris Lynch, had uncovered a ton of information detailing how this German operation, referred to as Guardaley, but also called APMC, Excipio, IPP, Crystal Bay Corporation, and a variety of other names, really runs the copyright trolling operations, finding lawyers and copyright holders to basically act as fronts. The Germans provide "experts" who pretend that the software used to track down people to shakedown is somehow infallible, but the experts have no credentials, and the "software" is very, very questionable. In a filing earlier this year, some of the web of deceit was revealed:

As the defendant’s own investigation revealed in Elf-Man, Crystal Bay Corporation, the company Macek (and Patzer?) supposedly “worked for” ... was a defunct South Dakota corporation, apparently incorporated in 2012 by a disbarred lawyer who, according to his website, “now specializes in creating ‘anonymous’ ‘shelf’ corporations.” .... The official address Crystal Bay Corporation registered with the South Dakota Secretary of State? It belongs to a mail forwarding company, and it is the same address given for the disbarred lawyer’s “Agent Services” company.... Same thing with the Stuttgart, Germany address given for Patzer and Macek: it corresponds to an office building in Stuttgart “that offers mail drop services and short term office rents, even by the hour.” ... The Elf-Man defendant also investigated the phone numbers given for Patzer and Macek. The regional code for Macek’s number corresponded to Karlsruhe, Germany. The regional code for Patzer was for a suburb of Karlsruhe....

The coup de grace from Elf-Man: when defense counsel there recently called the (Karlsruhe) phone number given for Macek in the initial disclosures in that case, the person on the other end of the line answered it “Guardaley.”

In the specific case, Lynch has been trying to recover attorney's fees from Elf-Man, asking for about $220,000. Elf-Man's lawyers countered with $5,000 in a series of emails [pdf] that are fairly amusing, with Lynch pointing out that the longer Elf-Man drags this out, the more that's likely to be revealed about Guardaley and the various German individuals behind it. Apparently, they decided to take their chances, insisting $5,000 was its final offer.

The judge in the case, Thomas Rice, has now granted around $100,000 in attorney's fees, showing that the $5k counter was a joke. This is a pretty big win, certainly. I'm sure that "Elf-Man LLC" and the various German troll puppet masters didn't expect to have to pay out $100,000 when they started this particular shakedown process. However, it is still a bit disappointing that the judge basically ignores all of the shenanigans uncovered about the German puppet masters and declares that part of the research unrelated and cuts it out of the fees to recover. As Fight Copyright Trolls notes, it's not surprising that the judge reduced the final amount owed -- as that happens frequently -- but it was still a bit disappointing that he brushes off the questionable behavior behind the lawsuit in the first place:

Third, this Court excludes all hours that are “excessive, redundant, or
otherwise unnecessary,” from Defendant’s proposed award.... Defendant’s counsel spent over 200 hours investigating whether there is a “real party in interest” other than Elf-Man, LLC; researching the involvement of
foreign third parties, such as Guardelay and APMC; researching whether Mr.
Griffin, an investigator in numerous other BitTorrent cases, is fictitious, and thus
perpetrating a fraud on the judicial system; and investigating whether Vision Films
was a necessary party. Mr. Lynch alone logged over 180 of these hours,
primarily investigating whether the potentially fraudulent investigator Mr. Griffin
had committed a fraud on the court in other cases. Because this case was
voluntarily dismissed before the relevance of these pursuits became clear, this
Court is unable to determine that such tasks were completely unnecessary.
However, based on the time entries and the procedural posture this case ultimately
reached, Defendant’s counsel’s pursuit of these topics, particularly Mr. Lynch’s,
can properly be characterized as excessive and not reasonably billed to a client.

While I absolutely understand why Judge Rice did this, it's a big part of the reason why these guys keep getting away with this crap. Every time their questionable practices, fake people, shell companies, etc. are called out, they cut and run, dismissing cases and heading for the hills. Sure, in this case they'll still have to pay $100k, but it's not really related to these activities that appear to be fraud on the court. They'll just move on to new shell companies, new shady lawyers and other questionable behavior. These guys have figured out that as long as they run away fast enough they may have to sometimes pay one of these attorney's fees rewards, but so many other people are falling for the shakedown game that it's still likely to be quite profitable.

from the well-that's-interesting... dept

We've discussed the "America Invents Act," a patent reform bill that passed last year after years of Congressional fighting. As we (and plenty of others) noted at the time, for all the hyperbole around the bill, it completely ignored nearly every problem with the patent system today, and seemed almost entirely useless. Our worry, then, was that this would kill off any appetite for Congress to take on the real problems of patents today. So it's good to see that a new patent bill has been introduced -- by Reps. Peter DeFazio and Jason Chaffetz, with a very, very minor change to patent law: it would allow those sued for hardware or software patents the ability to recover litigation costs if it's determined that the suing patent holder "did not have a reasonable likelihood of succeeding."

In other words, this is a bill targeted very directly at the pure trolls: the patent holders who sue companies with no real intention of taking a case to court, but rather just to get them to pay a settlement fee to avoid the (expensive) court costs in defending a patent infringement claim (which is quite frequently much more expensive than the settlement options):

Notwithstanding section 285, in an action disputing the validity or alleging the infringement of a computer hardware or software patent, upon making a determination that the party alleging the infringement of the patent did not have a reasonable likelihood of succeeding, the court may award the recovery of full costs to the prevailing party, including reasonable attorney's fees, other than the United States.

But what's much more interesting about this is that it seeks to carve out a specific definition for software patents. I know that in software circles there's been plenty of talk over the years about the problems of software patents, and many don't believe that software should be patentable at all. However, as defenders of the patent system like to point out, there's no such "thing" as a "software patent" defined in the law, so it would be difficult to say software isn't subject to patents. Well... this bill defines software patents:

SOFTWARE PATENT.--The term 'software patent' means a patent that covers--

"(A) any process that could be implemented in a computer regardless of whether a computer is specifically mentioned in the patent; or
"(B) any computer system that is programmed to perform a process described in subparagraph (A).".

Given the massive fight in previous years over patent reform, I fully expect to see patent system supporters throw a massive hissy fit over this very, very minor change to patent law, but it's so minor that I'm at a loss as to how they'll have any compelling argument. The only reason I can think to be against the changes here is if you're in the business of abusing the patent system to shake down innovators. I actually think that supporters of the patent system, such as pharma companies, should support this kind of change too. If the patent system can successfully slice off the problems associated with software patents, it means that there will be less pressure for massive patent system changes.

Of course, if you want real patent reform that takes on the larger issues that impact all sorts of areas (beyond just software), we've made clear our suggestions -- though there doesn't seem to be any appetite in Congress to make such major changes in the near future.

from the this-may-be-important dept

There's a potentially important legal battle going on following a highly questionable patent infringement claim made against Netflix and Blockbuster. The whole case seems pretty ridiculous. Basically a patent attorney had a rather basic idea on how to improve Netflix with a minor feature that pretty much anyone could have come up with, got a patent on it, formed a "company" whose only purpose was to sue... and then sued. The court quickly dismissed the lawsuit, which is now being appealed. However, Netflix is appealing itself on a separate issue: saying that the current system makes it much harder for those being sued to get attorney's fees, even in such ridiculous lawsuits.

Groklaw goes into more detail about the issues in the lawsuit, pointing out that those suing for patent infringement can get attorneys' fees on cases where willful infringement is found, but those who are sued (even for bogus patents) can only recover attorneys' fees in "exceptional cases." Netflix is claiming that this creates an unfair imbalance. Lots of companies seem to be agreeing with Netflix, as Amazon, Facebook, Microsoft, Oracle, Toyota, and others have all filed amicus briefs siding with Netflix.

This is, actually, quite a big deal. An awful lot of totally bogus patent infringement lawsuits settle just because it's cheaper to pay up than to fight it in court. Even if you "win," the legal fees may outweigh what you could have settled for earlier on. And this perpetuates the problematic system. First, many patent system defenders take those "settlements" as proof that there was infringement and that the patents are valid. Second, it just gives those companies more reasons (and money) to keep suing others. It's a huge problem for many companies today -- and if the court reasonably lowered the barrier on granting attorneys' fees against totally ridiculous patent claims, it might make some of those questionable patent holders think twice before suing.